EUR/USD Forecast: Pressure continues, 1.0980 critical support

EUR/USD Current Price: 1.1008

• US Durable Goods Orders up in December, core readings way negative.
• Sentiment improves ahead of Wall Street’s opening, futures trading in the green.
• EUR/USD barely holding above 1.1000, a corrective recovery not out of the table.

The American dollar remains the strongest across the FX board, particularly against its high yielding rivals. The EUR/USD pair hovered just above the 1.1000 figure for most of the day, sill under pressure after the release of mixed US figures. The country released December Durable Goods Orders, which rose by 2.4%, largely surpassing the 0.5% forecast. However, core readings were all in the red and worst than expected. The Non-defense Capital Goods Orders ex Aircraft fell by 0.9%, against a 0.% reading expected.

Market’s sentiment has improved ahead of the US opening, with US futures trading in the green and US Treasury yields moving away from daily lows. Safe-haven currencies have given up ground to the greenback, but those considered high-yielding remain under pressure. Speculative interest seems to be trapped between coronavirus concerns and upcoming first-tier events, a Fed announcement on monetary policy included.

EUR/USD short-term technical outlook

The EUR/USD pair is technically bearish, although an upward corrective movement is not out of the cards, given the better shape of the market’s mood and the oversold conditions of the pair. In the 4-hour chart, it keeps developing below all of its moving averages, with the 20 SMA providing dynamic resistance at around 1.1035. Technical indicators keep heading south within negative levels, without suggesting downward exhaustion. A relevant support level is 1.0980, with a break below it favoring a continued decline toward the 1.0900 figure.

Support levels: 1.0980 1.0950 1.0910

Resistance levels: 1.1035 1.1070 1.1100

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